Advanced Search
MyIDEAS: Login

Unemployment and Productivity Growth: An Empirical Analysis within the Augmented Solow Model

Contents:

Author Info

  • Bräuninger, Michael

    ()
    (University of the Federal Armed Forces Hamburg)

  • Pannenberg, Markus

    ()
    (Bielefeld University of Applied Sciences)

Abstract

Does a country’s level of unemployment have an impact on the long-run growth rate? Incorporating unemployment into a generalised augmented Solow-type growth model, yields some answers to this question. In particular, we show that the impact of unemployment on productivity growth heavily depends on the influence of human capital in the production function. In the traditional Solow model, unemployment has neither an influence on long-run productivity growth nor on the long-run level of productivity. However, if human capital matters, unemployment has a long-run effect on the level of productivity. Moreover, if we allow for endogenous growth within our theoretical framework, unemployment has an impact on long-run productivity growth. Using data from 13 OECD countries from 1960 to 1990 within a dynamic panel data framework, we find supportive evidence that an increase in unemployment indeed reduces the long-run level of productivity. Taken at face value our results suggest that if unemployment would have remained at the level of 1960 then productivity today would be roughly 10% higher than it is.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp136.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 136.

as in new window
Length: 34 pages
Date of creation: Mar 2000
Date of revision:
Publication status: published in: Economic Modelling, 2002, 19 (1), 105-120; see IZA Reprints 112/02
Handle: RePEc:iza:izadps:dp136

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: equilibrium unemployment; panel data.; Growth;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. C Bean & Christopher A. Pissarides, 1992. "Unemployment, Consumption and Growth," CEP Discussion Papers dp0100, Centre for Economic Performance, LSE.
  2. Francesco Caselli & Gerardo Esquivel & Fernando Lefort, 1997. "Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Working Papers Central Bank of Chile 03, Central Bank of Chile.
  3. Bean, Charles R, 1994. "European Unemployment: A Survey," Journal of Economic Literature, American Economic Association, vol. 32(2), pages 573-619, June.
  4. Robert J. Gordon, 1979. "The "End-of-Expansion" Phenomenon in Short-Run Productivity Behavior," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 10(2), pages 447-462.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp136. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.